The Thyroid Veteran Dr A Velumani shares his path to success and the franchising model in a dialogue with Entrepreneur.

Dr A Velumani quit his prestigious job as a scientist to do something on his own. With his passion for thyroid and a PhD in thyroid biochemistry, he started Thyrocare, a thyroid testing laboratory chain. He shares his path to success and the franchising model in a dialogue with Entrepreneur.

How did you make franchising concept work in diagnostics?

In healthcare, particularly diagnostics, no one thought about the franchising model. In 1996, I appointed the first franchisee not with the idea to scale it up but to take some support. I have split the franchising business into two parts, procuring and processing. Procuring, I give to franchisee while I keep the processing part, as technically processing that requires analysis and expertise, is a difficult thing to do.

I started with Thane and expanded to Mumbai, Pune, Surat, Cochin and Hyderabad. Today, we have 1,200 franchisees across the country. All our centers are franchisee owned. So we have been successful only because of the franchising network.

What do you require from a franchisee-to-be? What is there for them once they get connected to you?

Franchisees should be keen to enhance their livelihood with dignity using my brand. It is not really an entrepreneurial journey for them because only they need only four-five people to run the operations. It is in fact a decent self-employment opportunity where the brand supports you to get clients and decent margin is shared by the brand. On an average, my franchisees make Rs 50,000-1 lakh a month, which I don't think is an inferior income for someone looking for self-employment opportunities.

I think around 250 sq.ft of space is required with possibility of breakeven in six months. Those who can't scale faster might take two years to do that because if you don't know how to get market's attention, it can take a little
long. The initial investment required is Rs 1 lakh which is quite decent for 250-sq. ft space.

Proper know-how is essential for any business. How do you train your franchisees?

Every month, we add 15-20 new franchisees. In terms of training, we offer a week's training after procuring them, bring them to the laboratory and show them the kits and vials used and technology and which one they need to intimate well in advance even before the sample is sent to us which is a standard training program for four days. If someone is trained for four days, the trainer trains his subordinates and assistants. We have developed our IT in such a way that they cannot do mistakes unless they want to.

Is it right that you are working on an OYO Roomlike model in diagnostics?

What OYO Rooms did was they found plenty of unused hotel room inventories with less than around 40 percent occupancy. They realized that there were people looking for budget accommodation. So they target the
budget-conscious travelers. What we are doing is that there are plenty of labs doing only six CT (Computed Tomography) and MRI (Magnetic Resonance Imaging) scans per day whereas the opportunity is to do at least 40 scans per day. There we see the possibility of an OYO Room kind of a model. We have started working on it.

What growth are you targeting ahead?

We are a 700-people company and are presence in all district headquarters in the country. As people are getting older, the healthcare needs are also rising apart from the fact that there has been tremendous growth in people's per capita income. We are expecting 5,000 franchisees by 2020. Today, some of our franchisees have left because they learnt to do business on their own while some are still with us because they have grown well and that's part of the business.

(This article first appeared in the Indian edition of Entrepreneur magazine (March 2016 Issue).